When considering types of insurance to buy, possibly the most important asset is your home. Your home will likely be the most valuable thing that you buy so logic tells us that we should take great lengths to protect it. We do insure our homes against fire, damage and theft but what about against unemployment. Ever wonder how you would make that monthly mortgage payment should you loose your job.
Fortunately, there is unemployment insurance available to help. If your purchase an unemployment insurance policy to cover your mortgage you will experience a series of pros and cons. The first thing you should do before purchasing a policy is to make sure your mortgage payments won’t be covered via another policy. If you have a critical illness or life cover then you may not need this.
Generally, unemployment insurance for mortgage cover will make your mortgage payments for 1-2 years. This is in the event of lay offs or serious illness. They are advantageous of you think making your house payments would be difficult in the event of job loss, and you have no other savings or income to fall back on. They are also useful for those that are self employed and not entitled to any sickness or disability pay. Finally, they can be flexible. Many times they can be attached to other policies and used as an extension or top up.
There are a few down sides to unemployment insurance for mortgage cover. The first is that they are quite expensive. You may get better value for money by purchasing a serious or critical illness plan. They also cannot be used for anything but your mortgage. When you take out the policy this is the debt that you are insuring and the payout can only be used for your home. It doesn’t allow for any left over funds for things such as food or clothing.
If you are in an unstable job or are self employed, then unemployment insurance for mortgage protection could be a good idea. Before purchasing, make sure it is needed. If you have other policies make sure there is no overlap. This type of policy can be expensive. It should really only be purchased unless absolutely necessary.